Quote:
Originally Posted by vtec to vvel
https://www.cnn.com/2023/02/24/econo...ary/index.html
"Inflation surprisingly rose in January [2023]". No sh!t. Feds think just by raising rates, this will solve inflation. While raising rates is only part of the solution (and will only help up to a certain point with current conditions), the other part of the issue is the supply chain issue. The Feds are looking at the playbook from previous periods of inflation, and the issue with this is there hasn't been anything prior to what is going on right now in the world with the backend of a pandemic and the war in Ukraine. Global supply chain and shortages are still a problem, particularly semiconductor chips, and most production/manufacturing companies use borrowed money to fund a large portion of their operations. So if rates go up and borrowing costs go up, these companies will produce less in an already short-supply environment, which would drive up inflation based on simple supply/demand economics. Not sure why this is such a hard concept for the Feds to grasp.
For those that are thinking car prices will come down, don't expect this to happen any time soon. The issue with semiconductors is production requires neon gas, and guess who supplies half of the world's supply of this? Ukraine, and I doubt they are currently focusing on producing this with the war going on.
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There are real economic/security reasons why it’s imperative we support Ukraine in this war, besides the neon gas, along with us and Russia, Ukraine is the breadbasket of the world.
If USSR takes Ukraine, then they increase their economic clout vis a vis us in the world and we become more dependent on them (neon gas supply for example).
The main reason that is bad actually has less to do with importing more from another country or other basic economic reasons. It’s bc the US dollar is the worlds reserve currency and that allows us to run debt without consequences and impose economic sanctions anywhere effectively. China and Russia, Iran, North Korea HATE this and are trying to usurp our preeminent standing in the world order. This is why Ukraine matters. We must win bc our economic survival and American standard of living depends on it. (And if we can bleed our enemy slowly and break hem over time ((like what happened to us over the last 20 years in Iraq/Afghanistan)), so much the better.